How did HUD get this home?

Question

I am buying my first HUD home.  I looked at the property sales record. The home started into foreclosure April of 2011. Looks like there was a private mortgage-( just regular guy's name for the deed of trust in 2008.)

Then, in Jan 2012 it was sold on the courthouse steps to wells fargo for 168K.  The HUD listed it 2 wks ago for 135K.  Can someone explain this?

Kama Ward · Answer

Thanks for your answers Steve. I appreciate it. I'm a curious cat about details.
Luckily it hasn't killed me yet!

Steve Babiak · Answer

All foreclosures happen that way, in order to expose the property to public bidding. The lender is allowed to bid like any other party (and will usually bid to at least the amount that they want to be paid).

Various ways of loan guarantees - they all compensate the lender for some portion of the loss on a foreclosed loan.  And they all have a different formula.  Not really relevant to know all those details - and I won't claim to know them either.

You will probably see multiple documents all recorded upon the recording of the sale to you.  There should already be something recorded (a deed of some sort) for the change in ownership from the foreclosed borrower to the lender shortly after the foreclosure.

Kama Ward · Answer

Why does wells fargo have to buy it on the courthouse steps if they are the one to foreclose?
Does the gov. reimburse them for this loan? If so, how much? The original loan, or what they paid on the courthouse steps, or something else?
I don't see any tranfer docs to HUD, does this not need to be recorded?
I'm sure I am showing my ignorance here- which is good since I know nothing about it! Ha.
I guess I am asking how HUD gets any home. What are the legal steps?

Steve Babiak · Answer

The Wells Fargo loan would have been FHA, and those eventually become HUD houses after foreclosure.  Anything else you mentioned wouldn't lead to this being a HUD house.